What is an electronic purse?

The UK Banking Code defines an electronic purse as "Any card or function of a card which contains real value in the form of electronic money which someone has paid for in advance, and which can be reloaded with further funds and which can be used for a range of purposes".

Over the years there have been many proposals for systems to reduce consumer reliance on cash and cheques, especially for low value purchases (under £25). Smart card technology now offers a secure mechanism at an affordable price, ready to be used for electronic purses. These purses store pre-paid monetary value directly on the smart card.

For some time pre-payment cards have been in general use for applications such as public telephones. These disposable cards are loaded with a fixed amount of value, which is then reduced during use.

The next step was to make these smart cards reloadable with units of credit. This can be done at special terminals or automated teller machines (ATMs).

From this development it has only been a small step for the cards to be used for more than a single application.

A more detailed outline of the current technology and the main purse providers is given in the background information.

At this stage there is concern that insufficient thought is being given to the difficulties disabled consumers will have in using these systems. Legislation in various countries may require that electronic purses are usable by people with disabilities. It would be very costly to change designs and systems once they are in use, so it is important to consider the needs of people with disabilities from the outset.

Next topic